Voluntary Arbitration Legal Regime overall approved in National Parliament

Tue. 26 of January of 2021, 16:34h

The National Parliament discussed and overall approved, today, January 26th, 2021, the Law Proposal on the Legal Regime of  Voluntary Arbitration, with 57 votes in favour, no votes against and two abstentions, in a debate that was attended by the Minister of the Presidency of the Council of Ministers, Fidelis Manuel Leite Magalhães, and the Minister of Justice, Manuel Cárceres da Costa.

In the context of the approval of the Voluntary Arbitration Legal Regime, the legislative authorization to amend the Civil Procedure Code was also approved, in order to achieve the necessary harmonization with this new legal regime.

After reading the conclusions of the National Parliament’s Committee on Constitutional Affairs and Justice (Committee A), the Minister of the Presidency of the Council of Ministers made a general framework for this Law Proposal, explaining that it was prepared last year by the Ministry of Legislative Reform and Parliamentary Affairs (MRLAP), that cease to exist, together with the Ministry of Justice and that it falls within the scope of the processes of improvement of the justice sector and of legislative reform, the latter, with the cease of MRLAP, becoming coordinated by the Presidency of the Council of Ministers.

Fidelis Magalhães expressed his belief that the creation of the “voluntary arbitration legal regime will not  only improve the national dispute resolution process, but will also contribute to the improvement  of the business environment, competitiveness and legal certainty, for our commercial activity and to increase investments and business in our country”.

The Minister said that this Law Proposal aims to address the existing gaps and complete the national legal order. Firstly, it is a matter of resolving an “existing gap in the national legal order, related to voluntary arbitration”, to the extent that, “in addition to the legal and constitutional provision for the existence of arbitral tribunals” the Civil Procedure Code also presupposes the creation of the legal regime of arbitration”. It is also intended to “complete the national dispute resolution system, which must be a diversified system and which does not exhaust the organizational apparatus of the State courts”. This initiative creates “an alternative to the courts”  for conflict resolution.

Arbitration is an alternative method of resolving conflicts between the parties, vis-a-vis  the regular judicial system. The conflicting parties agree that the dispute is resolved by arbitrators appointed by them and the final decision is binding on the parties and has the executive power of the decision of the judicial courts.

One of the main advantages of arbitration is the speed in resolution of cases and the competence of the persons who decide the dispute, given the complexity and specificity of some of the topics under analysis. Following a set of international rules, enabling greater speed in conflict resolution and being decision-binding, fosters the confidence of external partners and mitigates possible barriers to their investment in the country.

The Law Proposal will now be analysed in detail by National Parliament’s Committee A, and then return to the National Parliament’s Plenary, for the final global vote.

Soon, the Resolution Proposal for the accession of Timor-Leste to the 1958’s New York Convention, on the recognition and enforcement of foreign arbitral awards, will also be discussed and voted on. Timor-Leste’s accession to this convention, which constitutes an essential pillar of international arbitration, having already been ratified by 161 States, constitutes, together with the voluntary arbitration legal regime, an important incentive to intensify commercial relations with the abroad and a factor in promoting foreign investment.